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Hermosa, Inc., produces one model of mountain bike. Partial information for the company follows: Number of bikes produced and sold 470 810 920 Total
Hermosa, Inc., produces one model of mountain bike. Partial information for the company follows: Number of bikes produced and sold 470 810 920 Total costs Variable costs $116,090 $ ? ? Fixed costs per year ? ? ? Total costs Cost per unit Variable cost per unit Fixed cost per unit Total cost per unit ? ? ? 222 ? ? ? ? ? $535.75 727 ? ? ? Required: 1. Complete the table. 2. Calculate Hermosa's contribution margin ratio and its total contribution margin at each sales level indicated in the table assuming the company sells each bike for $740. 4. Calculate Hermosa's break-even point in units and sales revenue.
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